In today’s briefing:
- JD.com: Three Key Controversies
- Blibili (9626 HK): 1Q23, Consequence of Subsidy Cut, Downgrade to Hold
- Bilibili: Mobile Game Further Declines and VAS Slowing Down; Cost Controls Help Reduce Losses
JD.com: Three Key Controversies
- Despite a recovery in Chinese retail sales, JD.com’s revenue growth slow-down has accelerated, losing market share to disruptive online competitors amidst ramped-up pricing pressure.
- Margin progression remains on track as JD.com refocuses on its core operations, optimizing its product mix and sales channels to improve operating efficiency.
- JD.com trades on only a 4.1x Dec-23f PE multiple when excluding its net cash balance sheet and associates at book value.
Blibili (9626 HK): 1Q23, Consequence of Subsidy Cut, Downgrade to Hold
- BILI’s revenue grew by zero YoY in 1Q22, but operating losses shrank significantly.
- The company reduced the subsidies to video uploaders, so that uploaders have been leaving the app.
- We believe the stock has an upside of 13% for yearend 2023. Downgrade to Hold.
Bilibili: Mobile Game Further Declines and VAS Slowing Down; Cost Controls Help Reduce Losses
- Bilibili Inc (BILI US) ’s 1Q2023 top line growth remained flat (+0.3%) while cost control measures helped reduce losses. This marks the lowest quarterly revenue growth for the company since 2017.
- Mobile games revenue further decreased while Value Added Services (VAS) revenue growth dropped to 5.1% during the quarter, lowest ever for the segment.
- There was no disclosure on paying user numbers and we do not expect any significant recovery in top line growth over the next 2-3 quarters.
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